The Best Trading Times for Forex: What You Need to Know Before You Start

Trading forex can be a lucrative, yet complex activity. By understanding the best trading times for forex, traders can increase...
Read More
The Best Trading Times for Forex: What You Need to Know Before You Start

Is Forex Scam? The Truth About Forex Brokers

Introduction: What is Forex Trading? Forex trading is a way to make money by trading currencies. In other words, it...
Read More
Is Forex Scam? The Truth About Forex Brokers

How to Use MACD Strategy to Trade Forex and Protect Your Portfolio

The MACD is a popular trend-following indicator. It’s not the most advanced or complex analysis tool, but it can be...
Read More
How to Use MACD Strategy to Trade Forex and Protect Your Portfolio

The Ultimate Beginner’s Guide to Binary Options Trading

Introduction: What is Binary Options Trading? Binary options trading is a form of options trading that allows traders to make...
Read More
The Ultimate Beginner’s Guide to Binary Options Trading

The Best IQ Option Robot for Trading on Your Behalf & How to Choose the Right One

Introduction: The Basics of IQ Option Robot Cross Signal IQ Option Robot Cross is a trading robot that can be...
Read More
The Best IQ Option Robot for Trading on Your Behalf & How to Choose the Right One

Is Pocket Option a Scam or Legit? Honest Review

Introduction: Pocket Option is a binary trading or investment company that has been in the industry for a number of...
Read More
Is Pocket Option a Scam or Legit? Honest Review

Why Do Poker Players Make Good Online Traders?

Introduction: Poker is an age-old card game that’s been played worldwide for many years.It’s synonymous with the Wild West and...
Read More
Why Do Poker Players Make Good Online Traders?

The Fast Payment Gateway “Payrim” and Why You Must Use It

Introduction: What is Payrim? Payrim is a blockchain-based decentralized payment system that allows users to make instant payments without any...
Read More
The Fast Payment Gateway “Payrim” and Why You Must Use It

The Complete Guide to Choosing the Best Binary Options Brokers

Introduction: The basics of binary options trading Binary options trading is a form of trading that enables traders to make...
Read More
The Complete Guide to Choosing the Best Binary Options Brokers

The Complete Guide to IQ Option Binary and How to Become a Successful Day Trader

Introduction: What is IQ Option? IQ Option is a binary options broker that has been on the market for more...
Read More
The Complete Guide to IQ Option Binary and How to Become a Successful Day Trader
What is Investing | Investing For Beginners

What I've decided to do is I'm going to put together an ongoing series on investing and it's probably best to start with the very basics. We'll slowly but surely work our way up to covering things like stocks versus bonds, mutual funds versus ETFs, asset allocation, portfolios, and more and I'm going to make sure it's easy to understand. So if those words sound intimidating, don't worry we're going to start from scratch and I promise you once I'm done with you, you won't be intimidated anymore.

What is investing in the first place?

Now of course in this series we're going to focus on the investment of money but we hear people talking about making investments with things other than money all the time, so for example maybe little Billy invested a lot of time reading about cars and engineering because he liked watching car races on TV. This likely increased his enjoyment level when watching those races so while this is not a financial investment for the purpose of our series, we do see the same framework of what investing is.

Investing
Investing

Investing For Beginners

Investing, in general, is the committing of resources into some endeavor or thing in the expectation of a positive return, In Billie's case, the resource he was committing was his time. The endeavor or thing was reading books and doing research online about cars and engineering. And his return was an increased level of enjoyment when watching car races.



What is investing money?

Now let's look at a financial investment which is what the rest of our series will be focusing in on. In this case the resource being committed is going to be money, the endeavor or thing is going to be a financial investment, which can be stocks, bonds, investment funds, real estate, and more, and the return is the difference between the money we end up with versus the money we put in.

What is investing
What is investing

So let's look at a simple example let's say Amal walks into her bank and says I want to invest $100 a salesperson at the bank might help Amal invest that one hundred dollars into a mutual fund which is a type of investment vehicle and don't worry if you don't know that term it's okay we'll get to it later in the series but let's look at three possible outcomes after one year. In outcome 1 the value of our holding in this mutual fund has increased to 110 dollars, in outcome to the value of holding in this mutual fund hasn't changed and is still one hundred dollars, and in outcome three the value of holdings in this mutual fund is now ninety dollars.

she's either had a return of plus ten percent, 0%, or negative ten percent. So goings back to our definition of investing. Amal committed resources, in this case financial resources, or money totaling one hundred dollars into an endeavor or thing, in this case the mutual fund which is a type of financial investment, in the expectation of a positive return. We showed three possible return scenarios and saw that it was possible to have a positive return a flat return or a negative return.

What is the simple definition of investing?

ok so now we have a working definition of what investing is in general and I've given you a bit of a hint that sometimes it might not work out in the way you might expect you can consider this like dipping our toes into one of the most famous and fundamental concepts in investing.

Trending Posts